Texas Sues Vonage for Deceptive Trade Practices

The State of Texas sued Internet telephony provider Vonage today for
deceptive trade practices related to the company's disclosures about its
911 emergency calling service. The lawsuit seeks a $20,000 fine for each
Texas customer Vonage has signed to its Voice-over-IP (VoIP) service.

The suit further requests injunctive measures to stop the New Jersey-based
Vonage from misrepresenting the type of emergency telephone service it
offers.

The Texas attorney general's office said it did not know how many customers
Vonage has in Texas, and a Vonage spokeswoman said that number is currently
being compiled to comply with the discovery request of the lawsuit.

Last week, internetnews.comreported that
a Houston couple that subscribed to Vonage's service tried to call 911
during a home invasion. Two victims were shot while the victims' daughter
unsuccessfully tried to get through to 911.

"This Houston family's moment of crisis signals a dire need for Vonage to
clearly communicate to its Internet telephone customers that 911 access
may not be available to them," Texas Attorney General Greg Abbott said in a
statement. "This is not just about bad customer service; it's a matter of
life and death."

The lawsuit alleges Vonage is deceiving consumers by not revealing in its
television commercials, brochures or other marketing materials that
customers must proactively sign up for 911 service. While Vonage
advertises that its service includes 911 dialing, Abbott said it fails to
make clear the customer does not automatically have the ability to dial
911 and be connected to emergency personnel.

Instead, the customer first has to take steps to activate Vonage's 911
dialing feature, which has significant limitations compared to
traditional 911 service. VoIP users can place a call from any broadband
connection, creating problems for 911 services that are dependent on
location specific telephone numbers.

According to the Texas lawsuit, when consumers purchase the plan over the
phone, call center salespeople also fail to disclose this information. Even
after signing up, the lawsuit claims, there are limitations to the service
that "Vonage customers may never know about unless they read the fine print
buried on the company's Web site."

Vonage spokeswoman Brooke Schulz said the company was interested in working
with the Texas attorney general's office to "give them comfort." She also
called the timing of the lawsuit "surprising," because Vonage was only asked
by Abbott's office to supply information last week.